The Royal Bank of Scotland is cutting costs by scaling back its in-person services and making a move towards using digital “robo-advisors,” resulting in the loss of about 550 jobs.
After posting its eighth successive net annual loss, the state-backed bank plans to remove nearly 220 investment advice positions, while also increasing the investment threshold for serving customers, various media sites reported on Sunday (March 13).
Going the “robo-advice” route may help the bank to still offer investment advice on a large scale but in a low-cost way. Rather than receiving guidance in person, the service requires customers to go online, answer questions about their financial situation and then receive investment suggestions from the bank, Financial Times explained.
“We want to help as many customers as possible invest their money in the right way for them,” an RBS spokesperson told FT. “The demand for face-to-face investment advice is changing. Our customers increasingly want to bank with us using digital technology. As a result, we are scaling back our face-to-face advisors and significantly investing in an online investing platform that enables us to help a new group of customers with as little as £500 to invest.”
While the idea of robo-advisors isn’t new, the popularity of their use among banks has grown with the emergence of increased regulation and the significant fines that can result from distributing misleading advice.
But the success of them catching on among consumers has yet to be seen.
In a study from Wells Fargo last year, which surveyed 1,983 affluent investors, ages 30 to 75, who have $250,000 or more in investable assets, nearly 52 percent said that they will never be comfortable working with a robo-advisor. While the attitudes may not be very positive today, the Wells Fargo Affluent Investor survey did find that most of those in their 30s (71 percent) and 40s (61 percent) stated they would try one in the next five years.